Korea's RPS Exit: The Replacement Looks Like RPS

The climate and environment surcharge has grown from 400 billion won to 4 trillion in twelve years. The government retires RPS in 2027 and the timetable is already published. Yet the bill before the National Assembly keeps the deployment obligation, the cost recovery and the penalty intact.

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The bill has grown tenfold

For twelve years the climate and environment surcharge, the levy Korean electricity consumers pay to fund mandated renewable support, has risen every year. It was 400 billion won in 2012. By 2024 it had reached 4 trillion. One projection puts it as high as 8 trillion won in the 2030s.

The climate and environment surcharge over time. It is the line on the electricity bill that carries the cost of mandated renewable support. From 400 billion won when RPS began in 2012 it reached 4 trillion won in 2024, a tenfold rise in twelve years. The 8 trillion won figure for the 2030s comes from a single source and has not been corroborated, so it is marked with hatching. **Source=KWI research, NEXT Group**

Sooner or later any government arrives at the question this raises. How long can this bill keep going to consumers?

RPS arrived in 2012 in place of the feed-in tariff. It placed a renewable share obligation on large generators, let them meet it by trading certificates, and left the market to find the cheapest route. It worked up to a point. Then its limits showed.